Great Trades

Great stock trades based on fundamentals and technical analysis.

Wednesday, April 22, 2009


Why we shorted the Nasdaq 100/QQQQ

This chart shows why our trading model shorted the Nasdaq 100/QQQQ today near the highs today.

While the other indices remained well off their highs of last week, the Nasdaq 100 was retesting its highs, with strong resistance keeping it from breaking out. One of the best technical sell indicators is a failed buy signal. This 15-minute chart of QQQQ shows the clear bullish cup & handle pattern that failed to break out. This market has been extremely resilient, but normally this setup at the highs would signal more downside ahead.

Can the cup and handle action still be in play in a higher time frame chart?
This cup and handle pattern is no longer valid in any time frame. The bottom of the handle was broken significantly. A breakout to new highs would still be bullish, but it wouldn't be this cup & handle pattern.
Thanks for enlightening me. I have some short positions too but the big fall looks like it will not come sooner than I hope.

Great blog, I enjoy reading it. Keep the good stuff coming!
So... are you still short?
No, stopped out on the breakout to new highs as we stated when we took the position. Will be focusing on a new project now...
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